The immediate threat of global pandemic has put the transition to renewable energy on the backburner.
While the COVID-19 pandemic is demonstrating the dangers of failing to prepare for a catastrophic risk event, progress on the transition to renewable energies is likely to slow as countries grapple with the long-term economic impacts of the outbreak.
“Clearly, the climate agenda in the post-virus world will have shifted from the standard experience so far,” wrote Will Nichols and Olivia Dobson, head of environment and principal value chains analyst respectively at Verisk Maplecroft.
“The concern for long-term climate goals is that economic recovery is seen as the only imperative and sustainable growth is put to one side.”
While some governments are stepping up their environmental initiatives, including South Korea, which has pledged to become a net-zero emitter by 2050, others are likely to use the pandemic as an excuse for further environmental deregulation.
“Already, the Trump administration has framed the situation to further its deregulatory agenda, softening enforcement of certain standards during the outbreak and rolling back Obama-era auto emission levels,” Mr Nichols and Ms Dobson wrote.
“Similarly, European airlines are demanding delays to new environmental taxes designed to limit air travel emissions, citing the significant financial impacts the industry is experiencing as a result of restrictions on movement to combat the virus spread.
The long-term prospects of the transition to renewables could depend largely on how countries plan their economic recovery. South Korea has already flagged a “Green New Deal” of renewable energy infrastructure programs, while China – which has been one of Asia’s largest proponents of the shift to renewables – could also use the moment to accelerate its programs.
“2020 can still be a transformational year for the climate if businesses are prepared to step up to the plate, recognise that we can’t go back to business as usual, and look beyond the current crisis with the aim of avoiding the next one.”
Stimulate new ideas. Stimulate new thinking. Top up your CPD and hear from industry experts with InvestorDaily’s Knowledge Centre. Keep up to date with the latest trends and reforms, all while adding to your CPD. Explore the knowledge centre Knowledge Centre now.
Despite unemployment falling to pre-pandemic levels, the central bank still thinks it’s too early to count its chickens on the success of ...